Daily FX Market Commentary

Good morning,

LMAX Close

USDJPY 110.996 | EURUSD 1.16698 | AUDUSD 0.7263 | NZDUSD 0.6639 | USDCAD 1.29821 | USDCHF 0.96933 | GBPUSD 1.3009 |

LMAX Highs and Lows 5.15am GMT

                                High | Low

EURUSD               1.16767 | 1.16596

USDJPY                 111.069 | 110.884

GBPUSD               1.30249 | 1.30039

USDCHF               0.96931 | 0.96765

AUDUSD              0.72658 | 0.72435

USDCAD               1.30229 | 1.29762

NZDUSD               0.66569 | 0.66358

EURCHF                1.13108 | 1.12915

EURGBP               0.89721 | 0.89623

EURJPY                 129.672 | 129.325

For today

• GBP: A quiet session with the market moving into the Tokyo session doing very little and holding around the opening levels, the market saw some limited buying taking Cable through the 1.3020 levels lightly before slipping back and holding through to the grey hour around the 1.3005 level. congestion through to the 1.3050 areas with stronger offers likely into the area before some weakness appears in a run to the 1.3100 level and stronger offers likely through deep into the handle, downside bids light back through the 1.3000 level and likely to continue that way with only minor interference on a push through the 1.2950 level, stronger bids are likely to be in the 1.2900 areas.
• JPY: USDJPY remained very quiet through the session holding in a tight range around the 111.00 areas with minor dips into the low 110.90 area and unable to push through the 111.05 level with a long weekend about to start, light offers to the topside until the market closes in on the 111.80-112.00 areas with stronger offers likely and quick stops through the level and then congestion beyond the 112.40 areas. Downside bids light through to the 110.80 areas with better bids in the area and congestion likely to continue through to the 110.60 area, weak stops on a move through the 110.40 area and some limited bids into the 110.00 levels.
• EUR: A very quiet session for the Euro with the market holding in the 1.1660 levels basing for most of the session there with a minor push through into the low 1.1670 level in mid-session before returning back to the base level for the move into the grey hour, topside offers through the 1.1690 levels likely to be light with the market seeing stronger offers moving into the area around the 1.1720 levels and continuing through to the 1.1740 level before the market lightens a little until the 1.1780 area. Downside bids light through to the 1.1600 areas with some limited strength around the level before weak stops appear on a break through the 1.1580 area for a quick test to the 1.1500 and stronger bids.
• AUD: A little stronger range with the market moving off the opening highs testing into the Tokyo session holding the 0.7260 areas, the market dipped to 0.7250 levels on debt concerns and interest rate rises for mortgage lenders holding around the 0.7245 level and unable to push back higher and holding through to the grey hour around the 0.7250 area. Downside bids increasing on any move through to the 0.7220-00 areas with weak stops possible on a dip through the 0.7180 area however, there is likely to be plenty of congestion on any attempt at the 0.7150 areas with stronger bids likely to then continue through to the 71 cent level, topside offers light on any test back through the 73 cent level and while there may be some weak stops above the level the market is likely to be weak until a push through into the 0.7340-60 levels and congestion then stretching through to the 0.7380 stronger offers.

Overnight News

CNY:

China unveils plans to curb new games and play, hitting tencent

EUR/GBP:

Germany aligns with the UK against Brussels on £100T derivatives danger

AUD:

Moody’s warns on interest only mortgage reset shock

RBA:  High debt levels could complicate further policy decisions

RBA: In 2018/19 corporate plan released on website

RBA: High debt could make economy less resilient to shocks

RBA: Main risks to financial stability mainly in credit quality

USD:

Trump: US studying if to label China a currency manipulator

Trump: China not playing on level playing field with currency

US is sending an unmistakable message to China 4 B-52 bomber flight through the E and S China seas

Trump says thinking about indexing capital gains to inflation

Trump said to back $200B China tariffs early as next week

TRUMP: EU offer for no auto tariffs is not good enough

The EU is almost as bad as China on trade, just on a smaller scale Tradethenews

Trade deal with Canada may come by Friday, or within a period of time, but it will come

NAFTA:

US Mexico trade pact faces scrutiny from lawmakers in US WSJ

NZD:

Weak currency only partially offset global price fall in milk

NZ ANZ consumer confidence -0.7% in Aug previous 117.6

USD/CNY/KRW:

China has denounced Pres. Trump as irresponsible and absurd after he blamed China for the breakdown in negotiations with N. Korea over the rogue states nuclear missiles UK times

Today’s data

Actual = A | Consensus = C | Previous = P | Revised = R All timings GMT

GBP       GfK Consumer Confidence Aug A -7 | C -11 | P -10

JPY         Jobless Rate Jul A 2.50% | C 2.40% | P 2.40%

JPY         Tokyo CPI Core Y/Y Aug A 0.90% | C 0.80% | P 0.80%

JPY         Industrial Production M/M Jul (P) A -0.10% | C 0.30% | P -1.80%

CNY        Manufacturing PMI Aug A 51.3 | C 51 | P 51.2

CNY        Non-manufacturing PMI Aug A 54.2 | C 53.8 | P 54

AUD       Private Sector Credit M/M Jul A 0.40% | C 0.30% | P 0.30%

05:00     JPY         Housing Starts Y/Y Jul A -0.70% | C -4.30% | P -7.10%

09:00     EUR        Eurozone Unemployment Rate Jul C 8.20% | P 8.30%

09:00     EUR        Eurozone CPI Estimate Y/Y Aug C 2.10% | P 2.10%

09:00     EUR        Eurozone CPI Core Y/Y Aug (A) C 1.10% | P 1.10%

12:30     CAD       Industrial Product Price M/M Jul C 0.00% | P 0.50%

12:30     CAD       Raw Materials Price Index M/M Jul C -0.30% | P 0.50%

13:45     USD       Chicago PMI Aug C 64 | P 65.5

14:00     USD       U. of Mich. Sentiment Aug (F) C 95.8 | P 95.3

Harry Hindsight

• GBP: A limited day and a little choppy through to the close, opening around the 1.3028 areas the market moved in a range around the 1.3030 area testing through to the 1.3040 areas and dipping down through the 1.3020 with no clear direction, even in the grey hour the market could only recover from the lows and the move into the London session saw the market testing just above the Asian highs to post the high for the day, and the market then dropping back to the 1.2990 level with Barnnier again doing U turns or flip flops over the coming offer for the UK if there is to be one, having quickly hit the 1.2990 level the market reversed and saw a steady climb back to the opening levels for the move into the NYK session, unchanged numbers in the US help see the USD slightly stronger but the Cable did recover a little through to the close testing to the 1.3010 areas into the close.
• JPY: USDJPY saw steady selling through the session with the Asian session fairly quiet with the market testing to the 111.75 areas before drifting through into the Tokyo session to drop quickly through to the 111.50 areas before holding quietly in the 111.60-70 areas through to the London session, Early London morning saw the market again adrift and slowly pushing through to the 111.50 level again into the NYK session and the selling increasing through the day with a tight channelled move through to the 111.00 levels and a quiet range through to the close.
• EUR: A slow drift through the Asian session with the market opening around the 1.1710 areas and apart from a small spike that was the high for the Tokyo session and a slow drift into the grey hour testing the 1.1690 areas, the move into the London session saw the market post the high for the day with unremarkable numbers sending the market to the 1.1720 areas before dropping quickly back to test through the 1.1680 level and a slow recovery into the NYK session, NYK were quick sellers and the market dropping back from the 1.1690 level triggering weak stops on the way towards to the 1.1640 level, the rest of the day saw the market recover a little and a push back above the 1.1660 levels for a quiet run to the close with the market unable to push back above the 1.1680 level.
• AUD: The Oz held quietly through into the Tokyo session before dropping quickly back from the early 0.7310 range to test to the 0.7280 areas and ranging quietly through to the London session, Early London saw a limited recovery to test back to the 0.7300 areas struggling with the level but remaining in the area through to the NYK session where the selling increased and the market dropped back in steps to make lows late in the session around the 0,7250 areas before ranging to the close holding just above the 0.7260 area.

Yesterday’s premiership results

NZD       Building Permits M/M Jul A -10.30% | P -7.60% | R -8.20%

JPY         Retail Trade Y/Y Jul A1.50% | C 1.30% | P 1.80% | R 1.70%

NZD       ANZ Business Confidence Aug A -50.3 | P -44.9

AUD       Building Approvals M/M Jul A-5.20% | C -1.90% | P 6.40%

CHF        KOF Leading Indicator Aug A 100.3 | C 101.2 | P 101.1 | R 101.7

EUR        German Unemployment Change (000’s) Aug A -8K | C -8K | P -6k

EUR        German Unemployment Claims Rate Aug A 5.20% | C 5.20% | P 5.20%

GBP       Mortgage Approvals Jul A 65K | C 65K | P 66K

GBP       Money Supply M4 M/M Jul A 0.90% | C 0.20% | P -0.30%

EUR        Eurozone Business Climate Indicator Aug A 1.22 | C 1.25 | P 1.29

EUR        Eurozone Economic Confidence Aug A 111.6 | C 112.2 | P 112.1

EUR        Eurozone Industrial Confidence Aug A 5.5 | C 5.9 | P 5.8

EUR        Eurozone Services Confidence Aug A 14.7 | C 15.2 | P 15.3

EUR        Eurozone Consumer Confidence Aug (F) A -1.9 | C -0.6 | P -1.9

EUR        German CPI M/M Aug (P) A 0.10% | C 0.10% | P 0.30%

EUR        German CPI Y/Y Aug (P) A 2.00% | C 2.00% | P 2.00%

CAD       Quarterly GDP Annualized Q2 A 2.90% | C 3.00% | P 1.30% | R 1.40%

CAD       GDP M/M Jun A 0.00% | C 0.20% | P 0.50%

USD       Initial Jobless Claims (AUG 25) A 213K | C 214K | P 210K

USD       Personal Income Jul A 0.30% | C 0.30% | P 0.40%

USD       Personal Spending Jul A 0.40% | C 0.40% | P 0.40%

USD       PCE Deflator M/M Jul A 0.10% | C 0.10% | P 0.10%

USD       PCE Deflator Y/Y Jul A 2.30% | C 2.20% | P 2.20%

USD       PCE Core M/M Jul A 0.20% | C 0.20% | P 0.10%

USD       PCE Core Y/Y Jul A 2.00% | C 2.00% | P 1.90%

USD       Natural Gas Storage A 70B | C 58B | P 48B

 

 

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